It's been widely reported and that makes it fact-esque. - Stephen Colbert

Will the Fed Get Audited After All?

It seems that for once - and I do mean once - my pessimism may have led me uncustomarily astray. It appears that the White House, Wall Street, and conservatives are actually going to lose the battle to make sure the Fed stays unaudited and therefore unaccountable in every way. According to both TPM and the NYT, Bernie Sanders' amendment is now expected to pass.

Really.

Even so, it seems to me that TPM's Brian Beutler might be getting just a tad carried away now that we may finally have a win against the combined pull of Rahm Emanuel and Wall Street lobbyists armed with duffle bags of cash.

Anti-Wall Street sentiment is so strong and Republicans have such a weak hand that Democrats in the Senate are suddenly finding themselves strengthening the financial reform bill with new amendments and beating back GOP attempts to weaken it.

The latest evidence of this populist surge is that the Senate is now expected to adopt an amendment, authored by Sen. Bernie Sanders (I-VT), that will require an audit of all of the Fed's emergency lending activities, starting in late 2007.*

Sanders' success in winning support for his amendment is emblematic of the greater debate over financial reform, which has, thanks to the Democrats' aggressive political posture, and the unpopularity of Wall Street, been much more favorable to progressives, even over the objection of powerful interests.

This isn't the "latest" evidence of a "populist surge" in Congress, it's the only evidence so far. "The unpopularity of Wall Street" may be highly favorable to progressive policies but the Blue Dog-led Democrat party has been easily able to ignore that favorability in favor of favoring the sacks of cash Wall Street spreads around Washington like manure on a corn field. There's no real "evidence" at this point that that's going to change any time soon. This could very easily be a once-in-a-lifetime shot, a bone thrown to the angry masses, and a bone without much meat on it at that. Remember, thanks to votes from 27 BD Dems, and Harry Reid's refusal to maneuver, the Brown-Kaufman amendment failed.

The Senate on Thursday rejected an effort by liberal Democrats to break up some of the biggest banks, defeating an amendment to financial regulatory legislation that would have imposed new limits on the size and scope of financial companies.

The amendment, proposed by Senators Sherrod Brown, Democrat of Ohio, and Ted Kaufman, Democrat of Delaware, would have forced some of the heaviest hitters on Wall Street, including Citigroup and Goldman Sachs, to shrink in size to limit the risk that big banks pose to the broader financial system.

The vote was 61 to 33, with 29 Democrats and 3 Republicans and 1 independent in favor, and 27 Democrats and 33 Republicans and 1 independent opposed.

Bear in mind that Bernie had to strip a few provisions out of his amendment just to get it passed against the fierce opposition.

The White House and the Fed had opposed the original proposal by Mr. Sanders, which would have allowed additional audits of the Fed. A modified proposal from Mr. Sanders appeared to address those concerns, but it would still force the Fed to disclose information that it had maintained was confidential.

The proposal would require the federal Government Accountability Office to conduct a "one-time audit of all loans and other financial assistance provided during the period beginning on Dec. 1, 2007 and ending on the date of enactment of this Act" under a number of programs the Fed used to respond to the near collapse of the financial system.

The amendment states that the audit "not interfere with monetary policy," addressing a concern raised by the Obama administration and the Fed.

Officials said the proposal would expand on changes made to the Fed in 1978, which subjected much of its operations to regular auditing by the accountability office but explicitly excluded monetary policy.

The key is not when they audit, it's what the[y] get to audit. They've excluded the workings of the Open Markets Committee where the decisions were made.

The incompetence occurred in the Fed's FOMC, where they missed signals, squashed dissent, and showed they were fools or tools. What the GAO will get, in a not fully public form, is a peek at how badly insolvent the banks were when the Fed accepted their toxic assets and gave them cash instead. So we'll get an accounting of how much looting occurred by not necessarily learn how the looting occurred or who designed it or covered it up.

Still, it's better than nothing and counts as a victory. And if there's no real evidence of a progressive pendulum swing, there are at least indications, as Open Left's Chris Bowers makes clear.

These results suggest that there is a larger pool Democrats who are disgruntled at the incumbents in their own party than previously imagined. In fact, this pool of disgruntled Democrats might well be larger than the much more publicized tea party.

Some evidence to support this thesis comes from Senate primaries. Of the five Senate incumbents facing serious threats to their renomination this year, three are Democrats. Further, not only are there more Democratic incumbents in danger, but they poll worse than their Republican counterparts. On the Democratic side, Arlen Specter only leads Joe Sestak by 5%; Michael Bennet only leads Andrew Romanoff by 6%, and Blanche Lincoln only leads Bill Halter by 7.5%. By way of comparison, John McCain leads his primary by 16.5%, and Bob Bennett leads his by 23% (Bennet is in danger in the activist-dominated caucus, however).

The surprising strength of the North Carolina primary challengers who didn't even run real campaigns, combined with the very real danger facing the three Democratic Senators listed above, suggests that other Democratic incumbents are in more danger against primary challengers than most election watchers have thought. Marcy Winograd's challenge against Jane Harman in CA-36 is a glaring example. Winograd received 38% of the vote in 2006, and has built a real campaign (raising nearly a quarter of a million). if the base of anti-inccumbent, disgruntled, mainly left-wing Democrats has grown in her district as well, then Jane Harman may well be toast.

We can certainly hope and we can certainly get out there and work to throw Ersatz Democratz out and put genuine FDR/Kennedy Democrats in, but don't kid yourselves that it's going to be easy, like a downhill sleigh ride. The Big $$$ ain't going to progressives, guys. Not now and not ever. The $$$ doesn't like us. We can win without it, we can even win in spite of it, but we'll never win because we have it.

Comments

Bang for the Buck: Boosting the American Economy

Compassionate Conservatism in Action

Molly

"We are the deciders. And every single day, every single one of us needs to step outside and take some action to help stop this war."

Zinn

"[O]ur time, our energy, should be spent in educating, agitating, organizing our fellow citizens in the workplace, in the neighborhood, in the schools. Our objective should be to build, painstakingly, patiently but energetically, a movement that, when it reaches a certain critical mass, would shake whoever is in the White House, in Congress, into changing national policy on matters of war and social justice."

Bono

"True religion will not let us fall asleep in the comfort of our freedom. Love thy neighbor is not a piece of advice, it's a command. ...

God, my friends, is with the poor and God is with us, if we are with them. This is not a burden, this is an adventure."

The Reverend Al Sharpton

Ray wasn't singing about what he knew, 'cause Ray had been blind since he was a child. He hadn't seen many purple mountains. He hadn't seen many fruited plains. He was singing about what he believed to be.

Mr. President, we love America, not because of all of us have seen the beauty all the time.

But we believed if we kept on working, if we kept on marching, if we kept on voting, if we kept on believing, we would make America beautiful for everybody.

Marx

''With adequate profit, capital is very bold. A certain 10 percent will ensure its employment anywhere; 20 percent will produce eagerness, 50 percent positive audacity; 100 percent will make it ready to trample on all human laws; 300 percent, and there is not a crime which it will not scruple, nor a risk it will not run, even to the chance of its owner being hanged.''